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Slow progress in getting back GSP facility

Sultana Yesmin
r I 1 HE US suspended GSP facility for Bangladesh on June 27, 2013. Following the Rana Plaza incident in April 2013 and, before that, the fire in the Tazreen Fashions in November 2012, the LIS decided to postpone duty-free access for Bangladesh's specialised products in the US.
According to the LIS authorities, the major causes behind the cancellation of GSP were mainly the incidents in garment factories; the increasing number of deaths of garment workers; unsafe working conditions; human rights violation; harassment of labour organisers; poor salary etc.
Immediately after the decision, the US added some preconditions for the revival of GSP facility. The new terms and conditions were improvement of labour situation; safety standards for garment factory workers; assurance of security in the workplace; formulation of comprehensive, concrete and coordinated plan to ensure worker's safety and secure workers' rights, etc. The authority also added that it would analyse the situation again after six months, following which the GSP suspension would be reviewed.
However, the US gave an Action Plan citing the measures for protecting workers' rights and fulfilling preconditions for getting back the GSP facility. The Action Plan calls on Bangladesh to significantly increase the number of labour, fire and building inspectors and to improve their training. It also recommends imposition of stiffer penalties for the violation of labour law, with particular focus on building safety standards.
In response to this attempt, Prime Minister Sheikh Hasina urged the US to withdraw the suspension of GSP. In order to regain GSP facility, the government has already taken some initiatives. For example, Bangladesh has adopted the 'Labour Law 2013' in order to protect the rights of the workers. The government has also initiated an attempt for the appointment of as many as 200 workers and the setting up of 7 fire fighting stations to improve the safety of factories. Moreover, the government has also amended the 2006 Labour Act to ease the conditions of trade union in the garment sector, though it has not yet been passed.
Despite all these initiatives, the recent unrest in garment industries due to low wage and unsafe working conditions, confrontation between owners and workers may bring about severe challenges for the country in getting back the GSP facility. Bangladesh has not yet been
successful in ensuring safe working environment and human rights in garment factories. The wage board fixed an amount of Tk.3,500 for garment workers on November 21, 2013. The workers were not satisfied with this scale, and demandedTk.8,000 as the minimum wage. The International Labor Organization (ILO) report titled "Bangladesh: Seeking better employment conditions for better socioeconomic outcomes" expressed grave concern about the human rights of the workers. The report said that Bangladeshi garment workers earn less than workers in Vietnam, India or Pakistan.
Will Bangladesh be able to fulfill the preconditions for the revival of GSP facility? How can the country restore its preferential access to the world's largest single market? Though many experts and policy makers have reaffirmed the chances of getting back the facility, it cannot be surely said that it would be easy for Bangladesh to get back the opportunity very soon.
Will Bangladesh be able to fulfill the preconditions for the revival of GSP facility?
Hoiv can the country restore its preferential access to the tvorld's largest single market?
Though many experts and policy makers have reaffirmed the chances of getting back the facility, it cannot be surely said that it would be easy for Bangladesh to get back the opportunity very soon.
In a hearing titled "Bangladesh in Turmoil: A Nation on the Brink" held on November 20, 2013 in Washington D.G., and arranged by Committee on Foreign Affairs and Subcommittee on Asia and the Pacific, John Stifton, Asia Advocacy' Director of Human RightsWatch said: "Worker rights and worker safety have been in the spotlight in the aftermath of the Rana Plaza factory collapse and Tazreen factory fire, and small improvements have been observed in the ability of workers to organise."
Cancellation of GSP will damage United States-Bangladesh bilateral trade relations. Bangladesh may also lose foreign investment in the long run. Many experts also warn that if Bangladesh failed to satisfy the LIS, it may also face losing the same kind of preference from the European Union (ELI) as well, which still provides huge support to Bangladeshi apparel products. The other possi-
ble challenges might be the loss of Bangladesh's competiveness in the world market, rise of duty in exports, reduction ofbilateral trade, and so on.
Bangladesh still has the chance to regain the GSP facility as the US has given six months for making visible improvements in the garment sectors and has also added some preconditions for the revival of GSP facility. The government should immediately take necessary attempts for sustaining the country's economic privileges in the world market. The government should formulate safety codes, stop harassment and arrest of workers, improve working conditions, and ensure non-discriminatory treatment under the World Trade Organisation (WTO) as soon as possible.
Unless Bangladesh is able to fulfil the requirements of getting back the GSP, the future of its garment sector along with all other industrial products will suffer in the long run. The latest report of the International Labour Organisation (ILO) warned: "Unless a comprehensive set of labour market and social policies are introduced, Bangladesh will be unable to maintain its economic momentum and improve living standards in a sustainableway."
GSP is a tool for providing economic privilege to 'most-favoured nation' in order to promote economic growth around the globe. The world's poorest countries are getting economic privileges from developed countries from 1976. Linder the GSP programme, 127 beneficiary developing countries, including 44 least-developed countries get duty-free treatment up to 5,000 types of products during the export to the US. The major objectives of GSP are to advance international economic development by lowering the costs of imported goods and reducing the tariffs of exported goods.
The GSP facilities allow duty-free access for some 5,000 products to enter the US market from least developed countries. LDGs are benefited as they can export up to 5,000 types of products free of duty to the LIS. Bangladesh, among more than 125 countries, receives economic privileges on United States tariffs under a World Trade Organisation (WTO) programme. Bangladesh gets preferences from the US on tobacco, sports equipment, porcelain china and plastic products. Around 5,000 Bangladeshi products are accorded as duty-free access to the US market.
The writer is a Research Assistant at Bangladesh Institute of Peace and Security Studies (BIPSS). Email: sultanayesmindu@gmail.com